While Eskom’s top management is confident of a turnaround in the power utility’s fortunes by 2023, the short-term outlook is rather bleak and could affect SA’s ability to meet its export order obligations.

While Eskom group CEO Phakamani Hadebe – in reaction to yesterday’s decision by ratings agency Standard & Poor’s to retain the state-owned entity’s CCC+ junk rating – was upbeat about the long-term outlook due to a “an ambitious turnaround plan”, he confirmed that there would be pressure in the short- to medium-term.

Newly appointed group chief financial officer, Calib Cassim, agreed, highlighting in a statement that while Eskom had secured 73% of its funding requirements for 2018/19, it still faced “several operational and financial challenges”.

“While progress has been achieved in laying the building blocks for a sustainable turnaround of Eskom, the company’s operational and financial performance continued to deteriorate in the six months to the end of September 2018,” said Cassim. The situation was expected to worsen before it improved, he added.

Yesterday, Eskom implemented stage 1 load-shedding for ten hours and Cassim said power cuts remained a reality as the system would remain constrained for the foreseeable future, until generation plant performance and coal stock levels improved.

Meanwhile, Alan Mukoki, CEO of the SA Chamber of Commerce and Industry (Sacci), reiterated an earlier warning that load shedding would have a negative impact on the South African economy.

"Our members' productivity is on the line. Load shedding means manufacturers have to stop production, while their costs are not stopping at the same time.” This could mean exporters missing delivery deadlines, he said.